Council committed to The Sage, despite funding challenges

Gateshead Council has maintained The Sage, a new arena and conference centre on the Gateshead Quayside, will be developed, despite concerns over funding.

The Council is seeking £20m (€23.29m/$23.26m) from the second round of the UK Government’s Levelling Up Fund, which is designed to invest in infrastructure that improves everyday life across the UK.

The latest attempt comes after it was reported in November that completion of the project had been pushed back after it was denied Levelling Up funding in last year’s Budget.

Martin Gannon, Leader of Gateshead Council, was quoted in The Times yesterday (Tuesday) as saying the £300m venture could not proceed without extra funding due to the rising cost of materials, especially steel, and that double-digit inflation was “absolutely disastrous for a construction project”.

Officials have now indicated to the Local Democracy Reporting Service that if the Council is again denied a share of the £4.8bn Levelling Up Fund, the project would have to be redesigned and scaled back – rather than being completely abandoned.

The Council said: “The Sage and the Gateshead Quays development have inevitably been impacted by external events which have led to funding challenges. A combination of the supply chain recovery from COVID, inflation and the war in Ukraine that has directly affected steel and gas prices as well as the wider energy costs has led to increased construction costs and a degree of uncertainty that has made it extremely difficult for the contractor BAM to confirm a fixed price construction cost.

“The Council has submitted a £20m Levelling Up Fund (LUF) Bid Round 2 to Government to support the project, which should it be successful will be utilised to support key objectives of the scheme. This will support Net Zero and digital infrastructure, critical to competitive business and leisure offers that enable the North East and UK to flourish on the world stage. This includes supplying heat from minewater and solar power; a local SME visitor showcase; and trialling innovative digital visitor experiences.

“The development at Gateshead Quays unlocks fantastic opportunities for further investment as part of the River Tyne Renaissance with £2bn investment in residential, commercial and leisure opportunities along the south bank of the River Tyne. Whilst there are challenges that require Government support we are committed to delivering this project to Level Up Gateshead and the North East.”

Global architecture and engineering firm HOK announced in March that plans for the new arena and conference centre development had been approved by Gateshead Council. Plans for The Sage, which has been designed by HOK, have been developed by Ask Real Estate and Patrizia AG.

The mixed-use entertainment district will be operated by ASM Global and will be anchored by a 12,500-seat arena, which will host music and cultural events, as well as sports such as boxing, darts and basketball. At that time, it was said the development on the banks of the River Tyne would cost around £260m to build.

In January, financial services company Sage acquired naming rights for the development, which is scheduled to open in 2024. The business and entertainment district will be the largest of its kind in the North East and it is estimated the project will provide a £70m annual boost for the local economy, creating 2,000 jobs.

The HOK-designed seating bowl consists of fixed, retractable and removable seats, allowing the venue to transform to accommodate audiences as small as 1,500.

Image: The Sage